UPDATE 1-Steelmaker Voestalpine upbeat on global economic upswing

Reuters Staff

2 Min Read

(Adds outlook, CEO, analysts, shares)

VIENNA, Nov 8 (Reuters) - Austrian speciality steelmaker Voestalpine expects sales and earnings to rise further in the first half of next year, supported by a global economic upswing, its chief executive said on Wednesday.

After reporting an expected 27 percent increase in second-quarter earnings before interest and taxes (EBIT) to 255.4 million euros ($296.2 million), the group also confirmed it expects a “significant” rise in 2017/18 earnings.

Investment activity is picking up in Europe and North America, and there are the first signs of an economic turnaround in Brazil, Chief Executive Wolfgang Eder said at a news conference in Vienna.

Demand, in particular from the car industry, remains strong, and trends in the industrial sectors are improving, he added.

“There is no sign that the positive development will change within the next six to twelve months,” Eder said. The industry veteran expects the upward trend in oil prices to continue too.

The former state-owned steelmaker has specialised in making finished parts for the automotive and aerospace industries in recent years and even offers systems for monitoring railroads, with traditional steel production currently generating only about 30 percent of its revenue.

Profit growth at the steel division defied expectations of a flat or lower results due to seasonal weakness, Jefferies analysts, who have a “buy” recommendation on the stock, said in a note to clients.

Voestalpine shares were up 0.4 percent at 47.99 euros at 1215 GMT. The stock has gained nearly 30 percent this year, in line with the Austrian blue-chip index.